NEW YORK CITY, NY - On September 24, Senator Kirsten Gillibrand (D-NY) wrote a letter to Agriculture Secretary Sonny Perdue, in which she called on the U.S. Department of Agriculture (USDA) to investigate if fruit and vegetable farmers in New York and across the country are receiving fair prices for their produce.
“Our New York farmers are facing a produce-pricing crisis. Throughout the state, fresh fruit and vegetable growers are hurting because the prices they get for their produce have stayed flat, and in some cases have even gone down, while the middlemen who move the produce from farmers to grocery stores and grocery store shoppers have seen the prices for the same produce increase,” Senator Gillibrand wrote in the letter. “Despite this, the USDA has not reviewed the fruit and vegetable industry in decades. We need to understand what is causing these unfair prices for our farmers, and I am calling on the USDA to complete a top-to-bottom review of the fruit and vegetable industry so that we can help New York’s farmers better price their produce and plan for their future.”
Many of us within the industry understand the seriousness of this request and responded in kind.
“The fresh produce industry operates on extremely tight margins, at every stage from grower to wholesaler to retailer. Our industry is the ultimate supply-and-demand economy, and our real goal must be to increase demand for fresh fruits and vegetables,” stated Tom Stenzel, President and CEO of United Fresh Produce Association. "That’s the key to raising prices paid to farmers, allowing reinvestment for growth. Transparency in any supply chain is a good thing, and we always welcome USDA’s analysis of our markets. It’s important for each sector in our supply chain not to lose sight of our goal to grow fresh produce consumption, while fighting with one another over whose share of a dwindling pie is bigger.”
Richard Owen, the Produce Marketing Association’s (PMA) Vice President of Global Membership and Engagement, also shared with ANUK his thoughts regarding the letter and industry pricing.
“While there are many factors in pricing, fresh produce sales are largely driven by supply and demand,” he remarked. “The perishable nature of fresh fruits and vegetables is a major concern at each step of the supply chain, and throughout the global marketplace, making produce a more costly and demanding product to handle and transport. Our industry is invested in developing and adopting technology that can improve efficiency and transparency, with the goal of increasing our capacity to meet demand and drive consumption and profitability for all of our members along the supply chain. We are open to USDA’s analysis and look forward to helping our industry communicate, and in turn consumers understand, the unique challenges facing the produce supply chain."
Tom Nassif, President and CEO, Western Growers, gave ANUK his perspective on the issue, and how he's seen produce pricing affect Californian growers.
"The trends noted by Senator Gillibrand in her letter to Secretary Perdue are being experienced by fresh produce farmers in the West, as well. In California, for example, we lost nearly 2,000 fruit and vegetable farms between 2012 and 2017, more than four percent. The long-term trend in California, as it is in New York, is toward the declining viability of family farms."
He continued, stating that, "Senator Gillibrand has part of the equation right. Prices paid to fresh produce farmers have trailed prices paid by consumers at the retail level. In fact, the spread can be as high as 300 percent to 400 percent for certain commodities. The consolidation of the retail industry is partly to blame for this phenomenon, which limits the ability of farmers to negotiate better prices for their fruits and vegetables, as well as the preference of retailers to purchase foreign produce at lower prices. However, another element jeopardizing the future of American family farms, and one absent from Senator Gillibrand’s analysis, is the increasing and unnecessary burdens placed on the fresh produce industry by state legislative and regulatory action, which is rendering domestic fruit and vegetable farmers uncompetitive relative to foreign suppliers."
He concluded, "We thank Senator Gillibrand for raising this important issue, and welcome her involvement in creating policy solutions that will ensure the competitiveness and profitability of American fruit and vegetable farmers."
Dante Galeazzi, CEO and President of Texas International Produce Association, offered further insight.
"The more information the industry has about the supply chain, the more informed and the better decisions each of those entities can make about their roles in providing fresh fruits and vegetables to the final consumer," he stated. "A study could prove extremely helpful, and all the stakeholders have a right to understand the flow and pricing of their goods through the marketplace. However, we would encourage the Senator to opt for more dialogue with these various entities before moving to accusations of 'unfair pricing.' We do not want regulations influenced strictly by politics, nor do we want to see limited markets or less fresh produce on store shelves. More can be accomplished together as an industry, rather than divided."
As we await the USDA’s response, AndNowUKnow will continue to report the latest.
